When a bank check is utilized in a transaction, the bank check is eventually deposited in a depositary bank. The deposited checks can be divided into two classes: (1) those drawn on the depositary bank and (2) those drawn on other banks.
The checks of the first class are retained by the depositary bank (which is a drawee bank as to those checks). This drawee bank debits each retained check against the proper customer's account, and then issues a monthly statement to each customer. The cancelled checks, or copies, may accompany the statements.
The checks of the second class are shipped to a central clearing agency, which distributes the checks to the proper drawee banks, which then process the checks as described above. These checks are sometimes called transit items.
This distribution process is highly automated. Early in the process, a set of numbers, called the MICR line (Magnetic Ink Character Recognition), is printed at the bottom of each check. The numbers indicate various items of data on the check, such as identity of the drawee bank, the monetary amount of the check, and so on. Automated equipment then uses the MICR line to route each check to its drawee bank.
Recently, a movement has begun to eliminate the transfer of paper checks as just described. Instead of paper checks, a digitized image, or bitmap, is captured of each check, including the MICR line. The digitized images are then transferred to the drawee banks instead of paper checks. However, since some banks do not possess the proper equipment to handle the digitized images, paper checks (called Image Replacement Documents, IRDs) are printed from the digitized images, and the paper checks, or IRDs, are transferred to these banks.
Some problems have been identified in this process. For example, sometimes the automated equipment mis-reads data on a check, and creates a MICR line which is incorrect or incomplete. Unless corrected, this faulty MICR line will carry over into the bitmap, and cause mistakes in later processing. As another example, sometimes the MICR line is initially printed correctly onto the paper check, but becomes defaced, so that automated equipment later cannot read the MICR line, either from the check or the bitmap.
Human technicians are employed to manually correct these errors. However, in order to efficiently employ the technicians, a strategy must be developed which allows the technicians to make maximum usage of their time. The invention provides such a strategy.
In addition, in the past, the level of care applied to the MICR lines differed, depending on whether the check was to be kept by the depositary bank, or returned to another bank. In the former case, (ie, involving checks of the first class discussed above) the bank was very interested that all information in the MICR line be correct. These banks employed human technicians to remove all errors in the MICR lines.
In the latter case (ie, involving checks of the second class discussed above), banking regulations did not require that the depositary bank guarantee complete accuracy of the MICR line. The depositary bank only concerned itself that the MICR line properly identified (1) the drawee bank and (2) the amount of the check. This procedure assured that the check reached the drawee bank, but did not assure that the entire MICR line was accurate. Any corrections required in the MICR line were left to the drawee bank which received the check, or possibly another party.
However, with the replacement of paper checks by digitized checks in the clearing process, these different levels of care for the MICR lines are no longer appropriate. The MICR line should be accurate for all checks. One simple reason is that the digitized image becomes a replacement for the cancelled paper check. To be a fully usable replacement, the digitized image must be accurate in all respects, including the MICR line.